MARKET CLOSE: NZX 50 holds at record as Xero hits record high, Chorus falls

 New Zealand shares were mixed, keeping the NZX 50 Index at a record high, as Telecom and Tower rose, while regulatory uncertainty weighed on Chorus.

The NZX 50 rose 4.404 points, or 0.1 percent, to 4698.027. Within the index, 26 stocks rose, 15 fell and nine were unchanged. Turnover was $154 million.

Telecom rose 1.7 percent to $2.365, only the second time since May it has closed that high, and accounted for $31 million of turnover on the index. The stock is rated a 'hold' based on a Reuters survey, with a price target of $2.28. Chorus, the network operator, fell 1.7 percent to $2.87 as politicians and lobby groups clashed over what would be a reasonable level for copper line access charges for the company building the nation's high-speed broadband network.

"The investment community would view a lot of it as hot air," said Grant Williamson, a director at Hamilton Hindin Greene. "Companies do need to make an acceptable return on infrastructure assets." Negative coverage of the debate "is causing one or two investors to ask questions."

Tower, the general insurance company which has divested its other units, rose 0.6 percent to $1.82 after saying it will return an initial $70 million of capital to shareholders from the sale of its life insurance business to Fidelity Life Assurance. Tower's ability to return capital has been hindered by the central bank's increased solvency margin requirements.

Guinness Peat Group, which owns 34 percent of Tower, fell 0.9 percent to 56.5 cents.

"Tower has weakened off ever since it became known what sort of reserves it needed to comply with regulations," Williamson said. Shareholders "are going to receive a reasonable amount now."

Contact Energy rose 0.8 percent to $5.17 and MightyRiverPower gained 0.5 percent to $2.18 as investors anticipate the release on Friday of offer documents for the selldown of Meridian Energy

Fletcher Building, the biggest company on the NZX 50, fell 1.6 percent to $9.50, having closed at a five-year high the previous day amid glimmers of life in Australia's housing market, including rising house values in Sydney.

Abano Healthcare was unchanged at $6.70 after the company rejected a proposed takeover from director Peter Hutson and Australian private equity firm Archer Capital at $6.97 a share. With agreement from another shareholder, they have about 19.9 percent of the shares locked up and want a scheme of arrangement to take the company private.

Rakon was unchanged at 22 cents after managing director Brent Robinson and his brother, executive director Darren Robinson, said they sold some 554,000 shares to fellow directors Bryan Mogridge and Bruce Irvine after breaching takeover rules with purchases despite their family holdings already being above the 20 percent threshold.

Auckland International Airport climbed 1.5 percent to $3.33 and Xero [NZX:XRO]  rose 1.3 percent to a new high of $19.06, valuing the loss-making online accounting software company at $2.24 billion.

(BusinessDesk)